Blame the snowstorms that buried much of the Atlantic Coast. "Some closings were simply postponed by winter storms," said Lawrence Yun, NAR's chief economist. The storms could also have a lingering effective on next the numbers for March. "Buyers couldn't get out to look at homes in some areas and that should negatively impact near-term contract activity."

The report is no surprise -- the dismal figures are in line with the predictions of a panel of economists gathered by Bloomberg News. They forecast existing home sales were forecast to fall to a 5 million annual rate, according to the median estimate of 74 economists in a Bloomberg News survey. Projections ranged from 4.75 million to 5.2 million, after an initially reported 5.05 million rate in January. The economists blame high unemployment for keeping people from shopping for homes.

However, the job market was also terrible last fall -- that didn't stop the homebuyer tax credit from creating a mini housing boom as it reached its earlier expiration and buyers hurried to get in on the deal.

"The key test for a durable recovery comes in the next few months as the tax credit deadline approaches," Yun said. "If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure a broad home price stabilization."